BANCO DO BRASIL, petitioner, vs. THE COURT OF APPEALS, HON. ARSENIO M. GONONG, and CESAR S. URBINO, SR., respondents.

G.R. Nos. 121576 7!. "#n$ 16, 2%%% FACTS& Cesar Urbino, Sr. sued Poro Point Shipping Services for damages the former incurred when one of the latters ship ran aground causing losses to Urbino. Urbino impleaded Banco Do Brasil (BDB , a foreign corporation not engaged in business in the Philippines nor does it have an! office here or an! agent. BDB was impleaded simpl! because it has a claim over the sun"en ship. BDB however failed to appear multiple times. #ventuall!, a $udgment was rendered and BDB was ad$udged to pa! %&'','''.'' in damages in favor of Urbino for BDB being a nuisance defendant. Petitioner Banco do Brasil assailed the $udgement on the ground that it is void for having been rendered without validl! ac(uiring $urisdiction over the person of petitioner. Petitioner Banco do Brasil ta"es e)ception to the appellate courts declaration that the suit below is in rem, not in personam, thus, service of summons b! publication was sufficient for the court to ac(uire $urisdiction over the person of petitioner Banco do Brasil, and thereb! liable to private respondent Cesar Urbino for damages claimed, amounting to %&'','''.''. Petitioner further challenges the finding that the *ebruar! +,, +--+ decision of the trial court was alread! final and thus, cannot be modified or assailed. Petitioner avers that the action filed against it is an action for damages, as such it is an action in personam which re(uires personal service of summons be made upon it for the court to ac(uire $urisdiction over it. .owever, inasmuch as petitioner Banco do Brasil is a non-resident foreign corporation, not engaged in business in the Philippines , unless it has propert! located in the Philippines which ma! be attached to convert the action into an action in rem, the court cannot ac(uire $urisdiction over it in respect of an action in personam. ISSUE& /hether or not the court ac(uired $urisdiction over Banco Do Brasil. HELD& 0he court did not ac(uire $urisdiction. 1lthough the suit is originall! in rem as it was BDBs claim on the sun"en ship which was used as the basis for it being impleaded, the action nevertheless became an in personam one when Urbino as"ed for damages in the said amount. 1s such, onl! a personal service of summons would have vested the court $urisdiction over BDB. /here the action is in personam, one brought against a person on the basis of his personal liabilit!, $urisdiction over the person of the defendant is necessar! for the court to validl! tr! and decide the case. /hen the defendant is a non2resident, personal service of summons within the state is essential to the ac(uisition of $urisdiction over the person. 0his cannot be done, however, if the defendant is not ph!sicall! present in the countr!, and thus, the court cannot ac(uire $urisdiction over his person and therefore cannot validl! tr! and decide the case against him. 0he publication of summons effected b! private respondent is invalid and ineffective for the trial court to ac(uire $urisdiction over the person of petitioner, since b! see"ing to recover damages from petitioner for the alleged commission of an in$ur! to his person or propert! caused b! petitioners being a nuisance defendant, private respondents action became in personam.

Bearing in mind the in personam nature of the action, personal or, if not possible, substituted service of summons on petitioner, and not e)traterritorial service, is necessar! to confer $urisdiction over the person of petitioner and validl! hold it liable to private respondent for damages. 0hus, the trial court had no $urisdiction to award damages amounting to %&'','''.'' in favor of private respondent and as against herein petitioner.